WESCO International, Inc.

Second-quarter sales were $6.7 billion, up 13% reported and organically. Adjusted EBITDA was a record $487 million, up 24%, and adjusted diluted EPS was a record $4.57, up 35%. Gross margin expanded 70 bps, and adjusted EBITDA margin increased 60 bps to 7.3%. By segment, CSS sales grew 18% with EBITDA margin of 10.2%; EES sales grew 11% with EBITDA margin of 9.2%; and UBS sales grew 7% with EBITDA margin of 10.0%. Free cash flow was $32 million in the quarter and $246 million in the first half. For 2026, Wesco raised organic sales growth guidance to 9% to 11% from 5% to 8%, reported sales growth to 10% to 12%, and total reported sales to $26 billion at the midpoint. Adjusted EBITDA margin guidance was raised to 6.9% to 7.1%, adjusted diluted EPS to $16 to $17.50, and free cash flow to $300 million to $600 million. Management said Q3 sales should grow low double-digits year over year, with EBITDA margin slightly lower sequentially due to mix.

John Engel framed the quarter as evidence that Wesco is outperforming the market through a combination of data center strength and broader secular demand in infrastructure, power, reshoring, and industrial spending. He repeatedly emphasized that Wesco is “not a one-trick pony,” pointing to mid-single-digit growth excluding data centers and record backlog across all three businesses. His tone was highly confident and upbeat, and he said the raised outlook reflects confidence in continued strong execution and sets up a strong 2027 as well.

Indraneel Dev said the quarter benefited from strong operating leverage, gross margin improvement, and favorable sales mix, with gross margin up 70 bps and SG&A at 14.5% of sales versus 14.4% a year ago. He noted that the company generated $32 million of free cash flow in Q2 and $246 million in the first half, but higher working capital needs mean full-year FCF is now expected at $300 million to $600 million. He also highlighted balance sheet progress: leverage ended Q2 at about 3.0x net debt to adjusted EBITDA versus 3.4x at year-end, after redeeming the 2028 notes and repurchasing $50 million of shares in the first half.

Analysts focused on whether data center growth was crowding out other end markets, how durable the broad-based growth is, why Q3 EBITDA margin is guided slightly lower, and what is driving the big gross margin gains. Management said they are not seeing evidence that data center demand is displacing other businesses; instead, power and labor are the broader constraints, while non-data-center sales still grew mid-single-digits. On margins, management said CSS and EES are benefiting from a “new leader effect” and from richer mix as projects mature and services content rises, while UBS grid services should be margin accretive. Questions on the Newark Engineering deal and grid services highlighted the company’s move toward global, end-to-end data center and power solutions, with management saying the pipeline is large and the new win is direct to a hyperscale end customer.